Your grandfather would like to share some of his fortune with you. He offers to give you
Question:
1. $8,000 a year at the end of each of the next eight years
2. $50,000 (lump sum) now
3. $100,000 (lump sum) eight years from now
Calculate the present value of each scenario using a 6% interest rate. Which scenario yields the highest present value? Would your preference change if you used a 12% interest rate?
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Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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